1. What are agency problems? and between what two stakeholders do agency problem typically occur?
2. Can a business have a positive accounting profit and a negative economic profit? Please explain.
3. What is a competitive advantage and why is it important?
4. What level of profits do firms earn as a market approaches perfect competition?
5. There are two types of annuities, annuity dues and ordinary annuities. What is the difference between the two?
6. What is the difference between a nominal and an effective rate of return?
7. Per the book, how do most companies adjust their analysis to account for daily cash flows?
8. What is the formula for valuing a constant growth perpetual cash flow?
9. What variable besides the interest rate would be important to a firm in making the long-term financing decision?
10. What is a complex cash flow?